Daily Brief China: Kuaishou Technology, Jinxin Fertility Co Ltd, Hunan Zhongke Electric Co,Ltd., Hainan Drinda Automotive Trim, Sunshine Insurance, HSBC Holdings, Sihuan Pharmaceutical Hldgs, China South City and more

• Short video companies are taking users’ time from other kinds of apps.
• Kuaishou has a lot of promising data, such as active users, paying users, and time spent.
• The operating losses significantly shrank in the past four quarters.

• Jinxin Fertility is a leading IVF service provider in China. It has done a series of M&A in the past two years.
• We examine the thesis of the company for a trade into 2023.
• We believe the company has big potential to realize its synergy post acquisition and ramp up post expansion. More favorable policy to come.

• There will be 10 changes for the Chinext Price Index and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 December.
• One surprise is the inclusion of Hunan Zhongke Electric Co,Ltd. (300035 CH) in both indices. Four stocks are adds to both indices while two stocks are deletes from both indices.
• The adds have outperformed the deletes over the last 8 months but have given up some of the gains over the last month. There is a big sector skew.

• There are 47 changes for the SZSE 1000 index that will be implemented at the close of trading on 9 December.
• We see 51 stocks being added to Shenzhen Stock Connect (47 index adds + 4 existing constituents) and 83 deletions from Stock Connect (15 index adds + 68 existing constituents).
• There could be 4 adds to the MSCI China in February and 11 adds to the FTSE All-World/All-Cap in March. Plus a bunch of deletes at the close 9 December.

• Sunshine Insurance (SUN HK), a Chinese life and P&C insurance company, is pre-marketing a US$1.0 billion HKEx IPO, according to press reports.
• In 2020, Sunshine P&C ranked seventh and Sunshine Life ranked 12th as measured by original premiums income market share, according to the CBIRC and the Insurance Association of China.
• The key elements of the bull case rest on Sunshine Life’s robust premium growth and high persistency ratio; Sunshine P&C’s underwriting profits in 9M22 and its high group solvency ratio.

• On October 6th we suggested selling HSBC vol vs buying ICBC vol
• We look at the trade performance both in terms of realised and implied vols
• We consider the trading options given the convergence in vols

• Sihuan is pursuing strategic adjustments actively, aiming to further improve the overall operating efficiency and financial performance of the Company. We summarized some business updates. 
• Based on our analysis, Sihuan’s business transformation to innovative drugs and medical aesthetics may not end up well, despite that they are “a good story” for the time being.
• Without persuasive long-term logic, share price of Sihuan could underperform. Therefore, considering the characteristics of Sihuan, we advise investors to do short-term trading – buy low and sell high.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China South City
• Lippo Malls Indonesia Retail Trust
• Perusahaan Gas Negara Perser